Freezing Injunctions in civil and criminal proceedings
Investigating whether it is worth suing a Defendant is a fundamental first step in commercial litigation. The costs and risks of taking legal action necessitate knowing that there will be property or money available to a successful Claimant to satisfy damages and costs orders.
In exceptional circumstances, an application can be made to the civil Court to freeze the Defendant’s property to prevent it being disposed of before the conclusion of the case. The civil Courts’ power to freeze assets is akin to the Crown Court’s power to make an order restraining the Defendant’s property in criminal proceedings. The Crown Court has the power restrain assets anywhere in the world belonging to a Defendant or other person under investigation.
That property may be subject to a confiscation order if the Defendant is convicted. An investigator will work hand in hand with a prosecutor to ensure that there will be a means to recover the proceeds of crime if the prosecution is successful.
I am currently working on a case which began as a civil action against a Defendant who unlawfully procured property from a vulnerable Claimant. My client had a civil remedy to trace that property and set aside the unlawful transaction. My pre-litigation enquiries into the Defendant’s assets revealed criminal conduct and proceeds of crime being sent abroad.
The Police became involved and a restraint order is being considered. In this case the criminal process offers a more appropriate remedy, as the Crown Court has the power to restrain assets which are outside of the jurisdiction.
The civil Court usually only has the power to freeze assets in the jurisdiction up to the likely value of the judgment. In civil cases where the Defendant appears to have benefited from the proceeds of crime, a criminal remedy may be preferable. In both cases a balance must be struck between securing assets and what is reasonable for the Defendant.